CHAPTER 4 - otherwise. 3. External 3. High because it comes...

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CHAPTER 4 4-8 Vouching refers to first selecting an item for testing from the accounting journals or ledgers and then examining the underlying source document. Thus, the direction of testing is from the journals or ledgers back to the source documents. Vouching provides evidence that items included in the accounting journals or ledgers have occurred (are valid). Tracing refers to first selecting an accounting transaction (a source document) and then following it into the journal or ledger. The direction of testing in this case is from the source documents to the journals or ledgers and tests whether transactions that occurred are recorded (completeness) in the accounting records. 4-22 a. 5 b. 4 c. 1 d. 2 e. 3 4-27 a. Type b. Reliability 1. Internal 1. High if internal control is excellent, moderate to low otherwise. 2. Internal 2. High if internal control is excellent, moderate to low
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Unformatted text preview: otherwise. 3. External 3. High because it comes from an external party. 4. External 4. High to moderate because the document has been circulated to a party outside the entity. 5. External 5. High because it comes from an external party. 6. Internal 6. High if internal control is excellent, moderate to low otherwise. 7. Internal 7. High if internal control is excellent, moderate to low otherwise. 8. Internal 8. High if internal control is excellent, moderate to low otherwise. 9. External 9. High to moderate because the document has been circulated to a party outside the entity. 10. External 10. High because it comes from an external party. Answers to Multiple-Choice Questions 4-12 B 4-17 B 4-13 C 4-18 B 4-14 B 4-19 C 4-15 D 4-20 D 4-16 A 4-21 A...
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This note was uploaded on 11/29/2009 for the course AMIS 627 taught by Professor Johnson during the Spring '08 term at Ohio State.

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CHAPTER 4 - otherwise. 3. External 3. High because it comes...

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